What is a Bond?

A bond is simply an IOU with interest. In essence if you buy bonds, you are loaning money to the issuer of the Bond for a fixed period of time. In this case, it's the Federal Government. 

At the end of that period, the value of the Bond is repaid and you will also receive a predetermined interest rate. The interest rates are usually paid annually.

What is the entry rate?

Unlike most Fixed Income products, Bonds have a higher entry rate. They usually go for millions of Naira but the return on investment is usually worth it. 

However, on Wealth.ng, you can start investing in Bonds with a minimum subscription of =N=100,000.00 (One hundred thousand Naira Only).

Who can Invest in Bonds?

If you are looking for an alternate form of investment and want to receive regular interest payments, then Bonds may be a suitable investment for you.

Is it Safe?

Bonds issued by the government are risk-free and do not have any default risk as they are backed by the government. If you’re putting much money in, you’re probably wondering how risky they are. No matter what happens to the issuing body, Bond holders are certain of getting their money back. So, there is nothing to worry about.

What are the benefits of investing in Bonds?

Among other things, Investing in Bonds has the following benefits:

  • Low Risk- compared to Equities
  • Fixed and Regular Income

  • Capital Appreciation

Are returns guaranteed?

You are almost certain of your Return on Investment (ROI) with bonds because they are clearly stated before investments are sold, and they are not as volatile to changes in the market.

They are usually priced higher but the return on investment is typically higher due to holding for longer periods.

Can I cancel before maturity?

You can sell your bond at any time before it matures. However, please note that you can break your investment with a little penalty fee of 1%. The fee is removed from the accrued interest, and the remaining amount is sent to your cash balance.

Similar to other investments, we advise that you cultivate the savings culture and let your money grow before you take it out. Besides, the longer you leave it, the higher your returns.

How is Bond different from Treasury Bills?

The major difference is that T-Bills on Wealth.ng are generally issued for tenures between 30 - 365 days. While Bonds are issued for Longer.

Tenures range from 3 years and above on Wealth.ng. Start enjoying the better life.

What is the difference between Bonds and Stocks?

Simply, Stocks are shares of ownership issued by a Company to raise equity; investors in shares literally own part of the company. 

Bonds are issued by the Federal Government as debt, similar to bank loans where the company owes investors periodical interest payments over the life of the bond plus principal reimbursement at the maturity of the bond.

Share prices are often determined by supply and demand dynamics, with a greater demand (e.g. due to expected growth of net income) moving the share prices up; bond prices are often determined by interest rate movements (e.g. a lower expected inflation rate will move existing bond prices up)

How do I get Started?

Investing in Bonds has never been this easy! All you need to do is:

  1. Login/signup on Wealth.ng
  2. Go to Marketplace
  3. Select “Bonds” & Select Tenure
  4. Make Payment via any of the Channels

There you are! You can now view your Bond investments in “My Portfolio” page and watch your interest accrue.

Is an investment in Bonds a good way to diversify my Portfolio?

In times of market volatility and uncertainty, cautious investors opt for secure options like Bonds. Including bonds in your strategy increases diversification, which makes your portfolio more resilient.

This is particularly relevant to investors who increased their stock exposure in recent times, due to low interest rates.

What is the minimum Investment amount?

Most bonds are only available for the rich and institutions. Here at Wealth.ng, we’ve made it available for you. Minimum investment is =N=100,000.00 (One hundred thousand Naira Only).

What are the Tenures available?

Bonds on Wealth.ng are available with the following tenures:

  • 3 Year Bond

  • 4 Year Bond 

  • 5 Year Bond

What is the interest rate for Bonds?

Bonds are now available on the Wealth.ng platform with massive interest rates. You can earn interest of up to 9.50%. However, please note that rates are subject to change depending on the market demands.

Will I receive a coupon?

For Bonds on Wealth.ng, investors will be paid interest for holding the bond at the end of the investment tenure. However, at the end of every year, the accrued interest for that year is paid directly into the users cash balance and the interest for the new year starts to accrue.